Legislature(1997 - 1998)

05/08/1998 04:20 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL 116                                                               
                                                                               
     "An Act relating to workers' compensation self-                           
     insurance."                                                               
                                                                               
Co-chair Sharp informed the committee that five amendments                     
had been filed related to the bill.                                            
                                                                               
Senator Adams MOVED Amendment 1.                                               
                                                                               
Senator Torgerson OBJECTED.                                                    
                                                                               
Senator  Adams explained  that Amendment  1  related to  the                   
responsibilities of the director's office.                                     
                                                                               
MARIANNE BURKE, DIRECTOR,  DIVISION OF INSURANCE, DEPARTMENT                   
OF  COMMERCE   AND  ECONOMIC  DEVELOPMENT,   explained  that                   
Amendment 1 would  address the fact that the  director had a                   
great deal of authority when  it came to the organization of                   
the entities. She  maintained that the bill  detailed a list                   
of  qualifications  that a  group  had  to satisfy;  if  the                   
conditions  were  satisfied,  the   director  would  have  a                   
specified timeframe  in which to  review the answers  or the                   
documents  submitted. She  stressed that  there would  be no                   
leeway   whatsoever  so   far  as   asking  for   additional                   
information, support,  or clarification. The  director could                   
only  deny issuance  of  a certificate  because  one of  the                   
listed  items had  not been  satisfied.  The director  would                   
have some discretion regarding whether  or not the documents                   
and information submitted were adequate.  It would take away                   
the  automatic  rubber-stamping   of  information  that  was                   
presented without verification or other support.                               
                                                                               
Ms. Burke  stated that  the division's  opinion was  that it                   
was  critical  that  the   information  being  presented  be                   
verified and  questioned if  necessary when  an organization                   
was  being  formed.  She   believed  any  insurance  company                   
seeking  to  do business  in  the  state  of Alaska  had  to                   
subject   themselves  to   questions,  clarifications,   and                   
additional information,  as well  as voluminous  support for                   
their position; this  was not provided for in  the bill. She                   
thought the bill had a "trust me" approach.                                    
                                                                               
Co-chair  Sharp  questioned  page  2 of  the  amendment.  He                   
wondered why the  word "may" was substituted  for "shall" in                   
several  places.   Ms.  Burke   replied  that   the  purpose                   
throughout Title XXI  was to make sure  an insurance company                   
stayed solvent;  there was  a great  deal of  discretion and                   
responsibility  placed  on  the director  to  explore  every                   
possibility of raising funds to  meet the claims in a timely                   
manner.  She added  there was  no guarantee  there would  be                   
another way  to do it,  but the  state had to  do everything                   
possible to keep the organization afloat.                                      
                                                                               
Senator  Torgerson queried  changing the  language. He  read                   
lines  30 and  31, which  used to  say "the  director shall"                   
(make up the  deficit) and the change to  "the director may"                   
(make up the deficit), and  opined that the state would want                   
to  order  the  company  make  up  the  deficit.  Ms.  Burke                   
explained  that  with the  word  "may,"  the director  could                   
immediately  order   the  action,   but  it  would   not  be                   
mandatory.   The  word   "shall"  would   make  the   action                   
mandatory; the  state would  want to be  able to  assure any                   
restructuring if there  was another way to make  good on the                   
claims  with the  assets  available. She  felt  it was  very                   
disruptive to  put an  assessment against  the net  worth of                   
the members;  in many  cases the  net worth  was made  up of                   
equipment and equipment  would have to be sold  to raise the                   
cash.  She acknowledged  that some  builders could  have the                   
cash readily  available, but she  had no way of  knowing the                   
form of the  net worth and no way of  assuring that it could                   
be raised  quickly enough to  meet the needs of  the injured                   
workers.                                                                       
                                                                               
Senator Donley  compared the bill, the  suggested amendment,                   
and the  uniform act;  he thought the  language in  the bill                   
(page 4, line  22) was identical to the uniform  act in that                   
it stated that  the commissioner "shall." He  thought one of                   
the  reasons  the  insurance  commissioners  felt  the  word                   
"shall"  was important  was that  it gave  some clarity  and                   
direction.                                                                     
                                                                               
Senator Torgerson MAINTAINED his OBJECTION.                                    
                                                                               
A roll call was taken on the motion.                                           
                                                                               
In favor: Adams, Phillips, Sharp                                               
Opposed: Parnell, Donley, Torgerson                                            
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The motion FAILED (3/3). Amendment 1 was not adopted.                          
                                                                               
Senator Adams MOVED Amendment 2.                                               
                                                                               
Senator Torgerson OBJECTED.                                                    
                                                                               
Senator  Adams explained  that the  amendment  related to  a                   
requirement  that  the  combined  net  worth  of  a  group's                   
membership  be   at  least  $1  million,   as  evidenced  by                   
financial  statements audited  by  an independent  certified                   
public accountant (CPA).                                                       
                                                                               
Ms.  Burke  opined  that  the  issue was  one  of  the  most                   
troublesome of the  bill, and was a  basic representation by                   
a  group of  people that  their  combined net  worth was  $1                   
million. She asserted that the  wording was exactly the same                   
as wording in  the model act. She added  that certain states                   
had found  it necessary to  increase the amount;  in Alaska,                   
the audited  net worth and what  might be thought to  be the                   
net  worth  could  be   completely  different  numbers.  She                   
understood and  appreciated the  desire of  the homebuilders                   
to  not have  to  present audited  financial statements  for                   
every single member;  she noted Amendment 2  did not propose                   
that.                                                                          
                                                                               
Ms. Burke reported that many  of the homebuilders were ready                   
to  have  audited  financial   statements  for  bonding  and                   
financing purposes. The essence  of the requirement would be                   
met if a given number  of people entered into an association                   
with  audited financial  statements and  their combined  net                   
worth  was $1  million  or  more, since  they  would all  be                   
jointly  liable; if  one individual  had a  net worth  of $1                   
million, the requirement in the bill would be met.                             
                                                                               
Ms. Burke pointed out that  audited financial statements for                   
individuals  or companies  would  reflect  more closely  the                   
realizable value  of the assets;  net worth could be  in the                   
form  of equipment,  tools, raw  land, or  cash. She  stated                   
that the  state wanted to  know that one of  the fundamental                   
elements of the bill (the  combined net worth of $1 million)                   
was verified by audited financial statements.                                  
                                                                               
Co-chair  Sharp   asked  whether   the  bill   required  the                   
financial statements to be certified  by a professional. Ms.                   
Burke responded  in the negative.  She stated that  once the                   
entity  was up  and in  operation, the  assets owned  by the                   
association would be audited, but not individual members.                      
                                                                               
Senator  Torgerson queried  details about  the uniform  act.                   
Ms.  Burke  clarified that  the  combined  net worth  of  $1                   
million was in  the uniform act; the  division was proposing                   
an amendment to the language in the uniform model act.                         
                                                                               
Senator Torgerson  asked whether the requirement  that would                   
be  added  was  in  the  act. Ms.  Burke  responded  in  the                   
affirmative.                                                                   
                                                                               
SENATOR TIM  KELLY asserted that  the uniform model  act had                   
been around since  1993, no state had adopted it  as it was,                   
and only four  states had adopted something  similar. He did                   
not  think the  act  had a  lot  of value  to  the state  of                   
Alaska. He did not think  it was unreasonable to assume that                   
at least of  few of the members in  the self-insurance group                   
could  be  audited  to  be  worth a  combined  total  of  $1                   
million. Not all  the members would have to  be audited, and                   
it could be  one member, if that member could  show at least                   
$1 million  worth of  real assets. The  only way  the figure                   
could be  obtained was  through an  audit. He  asserted that                   
any  group that  wanted to  be an  insurance company  in the                   
state had to be willing to be audited.                                         
                                                                               
Senator  Parnell stated  that  he was  troubled by  comments                   
that  it  was  acceptable  to  have a  few  members  of  the                   
association  be worth  $1 million,  but on  the other  hand,                   
there  could  be  requirements  to  have  everyone  involved                   
submit   the  numbers   before  evaluation.   He  wanted   a                   
safeguard. He asked  whether there was a  combined net worth                   
requirement  on reciprocals.  Ms. Burke  responded that  the                   
reciprocals  had $1.5  million worth  of cash  or acceptable                   
marketable  securities  they  started  out;  they  were  not                   
relying on the net worth of their members.                                     
                                                                               
Co-chair  Sharp  pointed  out  that  there  was  contributed                   
capital to the reciprocal.                                                     
                                                                               
Senator Kelly  added that the  net worth of the  members was                   
because  of  the  joint and  several  liability  clause.  He                   
argued that someone would have  to pay if there were several                   
injuries, because  the capital  would not be  available. The                   
group  would have  to go  to the  membership. The  amendment                   
would  only  require  that  there be  $1  million  worth  of                   
audited assets  to protect the  workers. The $1  million was                   
included in the model act that almost nobody had adopted.                      
                                                                               
Co-chair Sharp  asked details about other  states. Ms. Burke                   
replied  that  there  were  four  states  that  had  similar                   
legislation.   Based  on   the  information   received,  the                   
combined net  worth requirement  of each  one of  the states                   
was $1  million, except  for New  Mexico, which  required $3                   
million.                                                                       
                                                                               
A roll call was taken on the motion to adopt Amendment 2.                      
                                                                               
In favor: Torgerson, Adams, Phillips, Sharp                                    
Opposed: Parnell, Donley                                                       
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The motion PASSED (4/2). Amendment 2 was adopted.                              
                                                                               
Senator Adams MOVED to ADOPT Amendment 3.                                      
                                                                               
Senator Torgerson OBJECTED.                                                    
                                                                               
Ms. Burke explained  the amendment. There had been  a lot of                   
testimony about the specific  and aggregate excess insurance                   
and about where it could  be gotten. One of the homebuilders                   
companies represented  testified that they could  get better                   
arrangements at a less reputable  company, which was a major                   
concern to  the division. The division  wanted any aggregate                   
and specific insurance  to be issued by a  company that held                   
a  certificate of  authority  in the  state  of Alaska.  She                   
noted  that there  were 1,200  total insurance  companies in                   
Alaska, so availability  would in no way  be restricted. The                   
amendment  would assure  that who  the insurance  was bought                   
from was fully capitalized and regulated.                                      
                                                                               
Ms. Burke  continued that the legislation  as written simply                   
required that there  be evidence of the  availability of the                   
excess  insurance.  However,  the  availability  would  have                   
already been  proven; there was  earlier testimony  that the                   
excess  insurance was  available,  but whether  it could  be                   
gotten  and afforded  was a  different  matter. Amendment  3                   
would provide for  two things. First, it  would provide that                   
the  insurance  would  actually   be  gotten  and  not  just                   
available.  Second,  it  would require  that  the  insurance                   
would  be written  by  a "real  insurance  company," not  an                   
unregulated  "offshore" company  without  clarity about  how                   
the claims  would be  paid. She  asserted that  the division                   
felt very strongly that offshore  companies were a threat to                   
the people they insured.                                                       
                                                                               
Senator  Parnell asked  whether any  of the  1,200 insurance                   
companies in  the state currently  held a  valid certificate                   
authority  and  whether those  that  did  held specific  and                   
aggregate excess  insurance. Ms. Burke responded  that there                   
were  many hundreds  of companies;  in addition,  there were                   
surplus  line   companies  that  were  permitted   and  held                   
authority to operate in Alaska.                                                
                                                                               
Senator  Parnell  asked   what  it  took  to   get  a  valid                   
certificate of  authority. Ms. Burke replied  that a company                   
had  to  submit  financial  statements to  the  Division  of                   
Insurance  and demonstrate  that it  had sufficient  surplus                   
and capital  to write the  proposed lines of  insurance. The                   
company also  had to submit biographical  information on the                   
key  management people  to show  that they  were trustworthy                   
and  had   no  convictions   for  stealing   from  insurance                   
companies.  In  addition,  there was  a  risk-based  capital                   
formula that  had to be satisfied,  and a fee of  $2,500 was                   
required.                                                                      
                                                                               
AT EASE                                                                        
RECONVENED                                                                     
                                                                               
Senator Adams  MOVED an amendment  to Amendment:  delete "an                   
amount" and "acceptable" on line 1.                                            
                                                                               
REPRESENTATIVE PETE  KOTT, SPONSOR, spoke to  the amendment.                   
He thought  the standard  should not  be different  than any                   
other  existing   carrier  of  reciprocal   or  self-insured                   
employer  of the  state.  He was  troubled  by the  language                   
"maintained  at all  times." He  thought the  language could                   
eliminate  potential to  write  at the  end  of the  section                   
which would allow  a group to provide securities  in lieu of                   
re-insurance. He  opined that there  could be a time  with a                   
lot  of cash  available  and  a company  could  want to  get                   
security in another way.                                                       
                                                                               
Senator  Torgerson   asked  whether  the  standard   in  the                   
legislation  represented  a  different  standard  for  other                   
companies  in  the state.  Ms.  Burke  responded that  other                   
companies did not  have to rely on the  excess insurance for                   
their totals on  the second layer; they  capitalized and had                   
[unintelligible]. Even  self-insured individuals (employers)                   
had to have a personal net  of $500,000. A reciprocal had to                   
have $1.5 million [unintelligible].                                            
                                                                               
In response  to a question,  Ms. Burke responded  that there                   
was a totally different entity.                                                
                                                                               
Representative Kott added  that it was because  they did not                   
have cash; they had to get the insurance.                                      
                                                                               
Senator Donley  thought existing carriers,  reciprocals, and                   
the self-insured  were not required  to meet  the particular                   
requirement; the requirement would be unique.                                  
                                                                               
Co-chair  Sharp  queried  the difference  in  capitalization                   
requirements  for reciprocals.  He asked  whether there  was                   
still  a difference  regarding the  type of  assets pledged.                   
Ms. Burke  responded that  the entity had  no assets  of its                   
own as reserves. A reciprocal had $1.5 million.                                
                                                                               
Senator Adams referred to the amendment to the amendment.                      
                                                                               
Co-chair  Sharp pointed  to the  second line  and the  first                   
"and" and asked whether he  wanted that dropped out. Senator                   
Adams answered  in the affirmative.  Co-chair Sharp  did not                   
see where the word "amount" was.                                               
                                                                               
Senator  Kelly explained  that the  first line  should read:                   
"(3)  obtain specific  and aggregate  excess insurance  in a                   
form";  add  "and  in  an  amount"  (underlined),  to  read:                   
"obtain specific  and aggregate  excess insurance in  a form                   
and an amount acceptable to  the director." He stressed that                   
that was  what would take the  place of the lack  of capital                   
or reserves in the particular [unintelligible].                                
                                                                               
Co-chair Sharp  summarized that the  first line  would read,                   
"obtain specific  and aggregate  excess insurance in  a form                   
and amount and acceptable…"                                                    
                                                                               
Co-chair  Sharp   thought  the  proposed  amendment   was  a                   
technical amendment.                                                           
                                                                               
Ms. Burke reviewed the difference  between the amendment and                   
what  was  in the  bill.  The  bill  read "evidence  of  the                   
availability"  while the  amendment  was  saying to  "obtain                   
it." She maintained that the  bill did not require that that                   
be  obtained  from  an insurance  company  holding  a  valid                   
certificate of authority to do business in Alaska.                             
                                                                               
Co-chair  Sharp  noted  that   line  21  said  "evidence  of                   
availability" has been obtained or would be obtained.                          
                                                                               
Co-chair Sharp  called the amendment  "technically corrected                   
Amendment 3."                                                                  
                                                                               
A roll call was taken on  the motion to adopt Amendment 3 as                   
amended.                                                                       
                                                                               
In favor: Adams, Phillips, Sharp                                               
Opposed: Donley, Torgerson, Parnell                                            
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The motion FAILED (3/3). Amendment 3 was not adopted.                          
                                                                               
Senator Adams MOVED Amendment 4.                                               
                                                                               
Co-chair Sharp OBJECTED.                                                       
                                                                               
Senator  Adams  explained  that   the  amendment  would  add                   
present language in Section  21.47.050. The language existed                   
and  the amendment  would add  the underlined  language "and                   
its members."                                                                  
                                                                               
Ms. Burke  detailed that the  entity was not an  insurer and                   
did not have  any assets of its own;  capitalization was not                   
there.  She  added that  one  of  the critical  elements  of                   
protecting the  workers was  the combined  net worth  of its                   
members.  She noted  that many  industries had  cyclical net                   
worth; there were times when  the net worth was considerably                   
reduced  or nonexistent.  The division  wanted to  know that                   
there was  the ability  to verify that  there was  still net                   
worth out there.                                                               
                                                                               
Representative  Kott spoke  in  opposition  to the  proposed                   
amendment.  He argued  that an  amendment  had already  been                   
accepted  that  audited  the  financial  statements  of  the                   
group.  He  felt the  proposed  amendment  was redundant  in                   
examining the numbers,  records, accounts, and transactions,                   
especially  if the  members would  bear the  expense of  the                   
audit, which could run from  $1,500 up to $4,000. He thought                   
the  language suggesting  that the  director could  take the                   
action as  often as  he or  she wanted,  in addition  to the                   
expense,   made   the    measure   overly   burdensome   and                   
inappropriate to pass on to the group members.                                 
                                                                               
Ms.  Burke noted  that  the audit  amendment  passed by  the                   
committee related  to getting  the certificate  of authority                   
to  go   into  business;  Amendment  4   spoke  to  on-going                   
operations.  She asserted  that  the  two requirements  were                   
totally  different.  She  added  that  the  requirement  was                   
identical   to   requirements  reciprocals   and   insurance                   
companies had. She noted that  the entity itself was relying                   
on the members, as opposed to their own assets.                                
                                                                               
Co-chair  Sharp  pointed out  that  Amendment  2 required  a                   
certified audit by a CPA only  at the time of application to                   
verify the underlying assets.                                                  
                                                                               
Senator  Torgerson asked  whether an  individual could  be a                   
member and not pledge their  assets to the pool. He wondered                   
whether the  intent was  to consider  the assets  of members                   
only. Ms.  Burke responded that  the bill would  require all                   
members to sign a joint and several liability agreement.                       
                                                                               
Senator  Donley compared  the language  in the  bill to  the                   
uniform act.  He stated  that the  act was  almost precisely                   
the same as the existing language  in the bill. There was no                   
requirement in  the uniform act  that its  members' affairs,                   
transactions, accounts, records, and  assets be subjected to                   
any  frequency of  examination the  director might  want. He                   
agreed with the  sponsor that the proposal  was "drastic and                   
extreme" and too broad.                                                        
                                                                               
Co-chair Sharp MAINTAINED his OBJECTION.                                       
                                                                               
A roll call was taken on the motion to adopt Amendment 4.                      
                                                                               
In favor: Torgerson, Adams, Sharp                                              
Opposed: Phillips, Donley, Parnell                                             
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The motion FAILED (3/3). Amendment 4 was not adopted.                          
                                                                               
Senator  Adams  MOVED Amendment  5.  He  explained that  the                   
amendment related to a health  insurance group that would be                   
required  to  have and  maintain  surplus  in the  form  and                   
manner acceptable  to the director  equal to the  greater of                   
(with a list).                                                                 
                                                                               
Co-chair Sharp OJBECTED.                                                       
                                                                               
Ms. Burke  detailed that during  the hearings for HB  116, a                   
chair of a committee had asked  that the bill be sent out to                   
experts in the field. One  of the experts identified was the                   
president  of self-insured  entities,  who recommended  that                   
there be  at least a  one-to-one ratio; for every  dollar of                   
premium, there should be one  dollar of reserve. In the case                   
of the  bill, that  would mean $1  million in  reserves. The                   
expert was asked three specific  questions and his responses                   
were provided to  the homebuilders and the  division. He was                   
asked  whether there  was  adequate  protection for  injured                   
employees, whether  there was adequate  capital to  fund the                   
group,  and whether  there was  adequate  protection in  the                   
event  that a  group  became insolvent;  his  answer to  all                   
three questions was "no."                                                      
                                                                               
Ms.  Burke continued  that Amendment  5 did  not ask  for $1                   
million upfront, but for one-half  of what would be required                   
of a  reciprocal, or $750,000.  Then, over a period  of five                   
years,  the surplus  could be  built  up to  the point  that                   
there would be the  recommended one-to-one ratio. She argued                   
that if that seemed excessive,  she wanted to point out that                   
[unintelligible; name of a company?]  had less than $800,000                   
in  worker's compensation  premiums,  but had  a surplus  of                   
$13.8 million. She stressed that  the requirement was geared                   
to help a company build up  to the amount recommended by the                   
recognized expert.  She noted  that the  expert was  not the                   
division's   choice,  but   had  been   identified  by   the                   
legislature as appropriate to address the issue.                               
                                                                               
Ms. Burke emphasized that the  division's concern was having                   
the  money available  to  provide for  the  care of  injured                   
workers. The reserve would be  like a savings account in the                   
bank; it might  not be needed, but it could  be invested and                   
the investment  earnings used to  offset the  amount charged                   
in  premiums.  She  pointed out  that  the  reciprocals  had                   
investment earnings  that reduced  the amount of  money they                   
had  to collect  in  premiums.  The point  was  to keep  the                   
earnings for  themselves. A two-fold  purpose would  then be                   
served, to provide  a savings account at  the beginning, and                   
to  provide a  mechanism  for earning  investment income  to                   
offset the future cost of premiums.                                            
                                                                               
Ms. Burke  stated that the  division believed  the provision                   
was critical.                                                                  
                                                                               
Representative Kott  agreed that the provision  had been one                   
of  the crucial  components of  the  bill for  the past  two                   
years.  There had  been  arguments  regarding whether  there                   
would be enough  cash to pay benefits to  workers injured on                   
the  job.  He argued  that  whether  one report  or  another                   
conflicting report  were considered,  he was  convinced that                   
there  was  enough  capital  up front  to  pay  for  injured                   
workers.  He   referred  to   testimony  by   Alaskan  labor                   
organizations  in  favor  of   the  legislation;  the  labor                   
organizations  were   clearly  looking  out  for   the  best                   
interests   of  the   workers.   He   emphasized  that   the                   
legislation would  not establish  an insurance company  or a                   
reciprocal;  the  model  act  did  not  have  the  laborious                   
requirement.  In   addition,  the   four  states   that  had                   
implemented  the model  act  varied to  some  agree and  the                   
other  states had  legislation that  varied. He  stated that                   
Alaska would  not be on  the lower  end of the  spectrum and                   
would  not  be  on  the upper  end.  However,  Alaska  would                   
exceeded the average for the acts.                                             
                                                                               
Representative Kott  pointed out that  the top 20  riders in                   
Alaska had been  considered and the leading  carrier met the                   
one-to-one  ratio requirement;  the  other 19  he found  did                   
not, contrary  to testimony given.  He did not  believe they                   
were obligated  under statute or regulation  to maintain the                   
requirement.                                                                   
                                                                               
Representative Kott informed the  committee that Amendment 5                   
would hamper the particular program  from succeeding. He did                   
not  think there  was  any  way that  the  threshold in  the                   
amendment could  be met without significantly  affecting the                   
group's ability to succeed.                                                    
                                                                               
Senator Kelly opined  that the weakness of the  bill was the                   
lack  of requirement  for up-front  capital and  argued that                   
the  amendment  would  establish that  capital.  The  groups                   
hoped  to use  the  premium  for two  reasons;  first, as  a                   
business  expense to  pay cash  outlays, and  second, as  an                   
investment to  get a payoff at  the end. They hoped  to have                   
fewer-than-average  injuries  in  order   to  build  up  the                   
surplus,  and  then  redistribute  the  money  back  to  the                   
employees.  The point  was  to spend  less  money on  worker                   
compensation.                                                                  
                                                                               
Senator  Kelly   emphasized  that  HB  116   was  not  about                   
protecting the  worker. Under the best  scenario, the worker                   
would be treated the same  under a self-insured, reciprocal,                   
or insurance  company if there was  adequate capitalization.                   
The rest of  the people had money in the  bank if there were                   
injuries. However, there was no  capital up front, which was                   
the object of the amendment.                                                   
                                                                               
Senator  Kelly  pointed  out  that  some  labor  unions  had                   
testified  in support  of the  legislation because  they did                   
not have  "a dog in  the fight" for  the most part;  most of                   
the people covered by the  homebuilders were not labor-union                   
members  and  were not  paying  dues.  The fact  that  labor                   
unions were not  concerned did not mean  other people should                   
not be  concerned about the  Alaskan workers.  He questioned                   
whether  organizations  without  $750,000 to  put  up  front                   
should be  insuring Alaskan  workers. He  did not  think the                   
numbers would work. He believed  the amendment would provide                   
the  backup to  make sure  injured workers  would get  their                   
lost wages and medical bills covered.                                          
                                                                               
The OBJECTION was MAINTAINED.                                                  
                                                                               
A roll call was taken on the motion to adopt Amendment 5.                      
                                                                               
In favor: Adams, Phillips, Sharp                                               
Opposed: Donley, Torgerson, Parnell                                            
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The motion FAILED (3/3). Amendment 5 was not adopted.                          
                                                                               
Co-chair  Sharp   asked  whether  anyone  paid   an  injured                   
employee if the  company failed or whether  the worker would                   
have to  wait until the  failed company balanced  its books.                   
Ms. Burke  responded that there  was no back-up;  other than                   
the proposed legislation, there was nothing.                                   
                                                                               
Senator  Adams   pointed  out  that  there   had  been  four                   
amendment votes  that failed  with three-to-three  tie votes                   
because  of  a  missing  member.  He  wondered  whether  the                   
measure  could  be held  overnight  until  the other  member                   
could be present.                                                              
                                                                               
[SFC-98, Tape 163, Side B]                                                     
                                                                               
There  was  a  discussion   about  the  version  before  the                   
committee.                                                                     
                                                                               
Senator  Donley MOVED  to REPORT  SCS CSHB  116(FIN) out  of                   
committee  with  individual   recommendations  and  attached                   
fiscal notes.                                                                  
                                                                               
Senator Adams OBJECTED.                                                        
                                                                               
A roll call was taken on the motion.                                           
                                                                               
In favor: Donley, Torgerson, Parnell                                           
Opposed: Adams, Phillips, Sharp                                                
                                                                               
Senator Pearce was absent from the vote.                                       
                                                                               
The  motion FAILED  (3/3). The  bill was  not reported  from                   
committee.                                                                     
                                                                               
Co-chair Sharp  noted that  the bill would  be on  the table                   
the following morning.                                                         
                                                                               
CSHB 116(FIN) was HEARD and HELD in committee for further                      
consideration.                                                                 
                                                                               
Co-chair Sharp RECESSED the meeting to the call of the                         
chair at 5:15 p.m.                                                             
                                                                               

Document Name Date/Time Subjects